Positive side effects? The gift brought everyone to the same table. The UBS client adviser, who originally only took care of Lydia’s assets, now also took care of the gift. Lydia had been so impressed by the adviser’s excellent work that she put her in touch with Christoph. A short time later, Christoph decided to transfer his and Cécile's assets from their previous bank. After signing, the client adviser spoke to him in private, and didn't beat around the bush. He appreciated that. She asked what he intended to do with the remaining assets. The client adviser showed him the potential consequences, specifically the financial ones, if he didn’t manage his succession. When someone has clear ideas about transferring assets, certain measures, such as drafting relevant documents, must be tackled and met proactively. The assets that Christoph and his wife built up comprised securities, real estate and a small art collection.
Today, Christoph König completely and totally trusts in his client adviser because she has always acted as an unbiased moderator between him and his children. Whenever necessary, the client adviser refers them to competent specialists, such as financial planners. An expert at UBS was even able to offer a recommendation for his wife's small art collection. “We were able to successfully moderate the succession because Christoph König and his family trusted our knowledge. Finding a solution across the generations was possible as their understanding for one another developed in joint discussions,” says the UBS client adviser.
An integral investment concept
The Königs gradually itemized each asset, and were thus able to manage the succession as best as possible. They set up a three-part investment concept for the family’s assets. For Christoph and his wife Cécile, it was important to draft all necessary documents, e.g., an inheritance contract and advanced care directive, in addition to a succession plan. The Königs set up a care representative in case they lost their power of judgment. Both realized that they would have to regularly check the validity of the documents related to the family’s assets so that any changes to the family or their wealth were always reflected. The client advisor worked closely with the family’s lawyer to draft the inheritance contract.
“Christoph and Cécile König, and even their children, liked the integral three-part investment concept we suggested for the family’s assets that hadn’t yet been distributed,” the client advisor explained. Christoph and Cécile König's current and planned expenses are covered by the first part of their assets. The capital from the second part covers their livelihood for the long-term, including any costs of care in old age. And the third part covers the König's excess capital that they can pass on to their children.
The Königs created a personalized investment strategy for each of those three parts together with support from their UBS client adviser and specialists. The respective portfolios were structured clearly and presented transparently, and shown to all involved. “You ultimately did a great job with all of that,” Lydia and Stefan unexpectedly praised their father during a quiet moment. He had to laugh, because: “My children aren't that different after all.” Christoph felt a good sense of security knowing he can maintain his standard of living and also how much he can pass on to his children.
Checklist for passing on your estate
When preserving a family's assets over generations, timely measures can prevent conflict:
- Discuss together what value – also emotional – each asset in the inheritance has and what it means for succession planning.
- Check which documents are needed to implement the desired succession solution and draft any that are missing.
- Existing solutions should be discussed periodically and modified if necessary. This especially applies if basic parameters have changed, e.g., life or property situation, residence or succession.
- As soon as an estate plan has been drafted, create a coordinated and cross-generational investment concept.
- The next generation can support their parents by getting a power of attorney.
UBS Family Banking
UBS Family Banking believes two central features are key to the sensitive topic of “Inheritance and Bequeathing".
Fair distribution of family assets
- Developing a common understanding of personal hopes and needs while thinking of the next generation.
- Setting up a financial plan and getting an overview of assets.
- Developing and regularly reviewing the succession solution.
Preserve family value across generations
- Developing your own approach to investing.
- Discussing and selecting a suitable investment strategy.
- Including the next generation in the investment process.
This article was written by NZZ Content Solutions on behalf of UBS.